Transportation Capacity Management and the Evolving Logistics Business of Ecommerce

With the 'explosion' of e-commerce transactions being executed online, logistics managers are having to get creative to find capacity for the exponential amount of trucks needed to make deliveries to/from warehouses, stores and customers’ homes.

Retailers, distributors, suppliers, and manufacturers need innovative and robust solutions to beat the competition and create a sustainable edge.

In a recent Logistics Management article titled, “Evolution of E-commerce: The possibilities of tomorrow,” the writer, Roberto Michel, interviewed several thought leaders and industry analysts about the trends and solutions that should be of interest to industry leaders.

In the article, Kuebix’s own Dan Clark was quoted discussing how to combat issues caused by the boom in e-commerce, which is tightening truck capacity even more. “To deal with this challenge, companies need to find all possible transport opportunities, such as tapping into otherwise empty backhauls.

The name of the game is capacity,” says Clark. “You need systems that allow you to be exposed to as many capacity opportunities as possible.”

“According to Clark, a Transportation Management System (TMS) should be adept at connecting to multiple freight matching marketplaces and online logistics communities so that the shipper organization can match orders with capacity from more brokers, small independent trucking firms, and fleet operators. ‘You need to be able to quickly access all of those potential opportunities and match your loads with that capacity,’ he says.”

“Of course, TMS still needs good analytics and planning logic, especially when it comes to what Clark calls ‘deconstructing’ truckloads into less-than-truckload (LTL) shipments to see if breaking orders into LTL moves makes sense for both service level and costs.”

As e-commerce has evolved, new processes, trends, and technologies have kept pace to facilitate the journey, including:

• Platooning, which is a group of trucks driven in a tight formation with a human driver in the lead truck and the other trucks driverless.
• Supply chain control towers that give visibility to supply chain operations combined with predictive analytics to provide even more information for better decision-making.
• Digitization of freight forwarding with cloud-based access to freight rates, quotes, etc.
• Distributed Order Management for centralized control of inventory and order processing.
• Blockchain to improve tracking and tracing of products through the supply chain.
• Predictive analytics with machine learning and AI recommended solutions to problems and answer “what-if” questions for advanced analytics.
• New transport modes such as the hyperloop for high-speed transport.
• Multi-carrier parcel software integrates with TMS and WMS for added functionality.
• Dynamic routing for real-time tracking and route optimization of fleets.
• Automated vehicle technology that powers driverless trucks.

Another trend that Dan discussed in the article was about last-mile deliveries, saying, “The growth of e-commerce is driving a greater need for efficiency in last-mile delivery.”

For last-mile carriers, they’ll want to be able to closely track where their driver and truck assets are and match that knowledge to shipment opportunities coming from brokers and online logistics communities. Through such ‘digital matching’ of assets to deliveries, carriers can find backhauls and make operations more cost-efficient.

Over the longer term, the last-mile challenge in urban areas will also be addressed by the build-up of new types of warehouses or means of last-mile distribution. This might involve older shopping malls being converted to warehouse space or new approaches such as AVs that act as mobile warehouses.

I think absolutely that we’ll see some new approaches in dense metro areas because there needs to be enough space close to population centers to hold the inventory needed for same-day deliveries.”

Read: Industry Experts Discuss Technology Trends & Solutions for Efficient Ecommerce Logistics

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